Expensive and Long U.S. Campaigns: A Competitive Disadvantage?

A member of the audience yawns behind a copy of her program at the Franklin County Lincoln Day Dinner, where U.S. Republican presidential candidate Mitt Romney delivered remarks (Jonathan Ernst/Courtesy Reuters).

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Of the competitive disadvantages faced by the United States, its democratic system is not supposed to be one of them. Quite the opposite. The stability of the U.S. democratic process and the trusted legal system it has produced have long been a competitive advantage. It is a big reason why so many global business powerhouses are headquartered in the United States.

But the recent World Economic Forum Global Competitiveness Report found that business concerns about the U.S. political process is one of the major factors pulling the U.S. down in global rankings. Jonathan Browning, President of Volkswagen America, said at a Brookings event last week: “[The United States] needs to restore global confidence in the workings of its political system” to continue to attract foreign investment.

Two worrisome trends unique to the United States—the spiraling cost of elections and the resulting pressure to raise funds—are eating into the integrity of the U.S. democratic system.

New this time around are Super PACs. The Supreme Court’s Citizens United decision of 2010 left Super PACs unfettered to raise an unlimited amount of money from corporations and individuals and spend it however they choose during campaigns so long as they are technically independent from the campaigns. The Super PAC is fast becoming the spending colossus of U.S. politics. To date, they have raised nearly $400 million in the 2012 election cycle, and spent much of it on negative TV ads. Such “independent spending” was less than $100 million in 2008.

Raising money takes time, which is one reason why presidential campaigns now last twice as long as they did in the early 1970s. It would be one thing if candidates were devoting more time informing or familiarizing themselves with voters. But both President Obama and Mitt Romney have held fewer public events and rallies than their predecessors and more intimate gatherings with big-ticket donors.

No other wealthy democracy comes close to spending so much money and time for its elections. The UK spent just $49 million on its 2010 election, one-quarter less than its 2005 election. Many countries, the UK included, do not restrict the amount of money individuals can contribute to elections. But with such short elections, there is hardly the time to fundraise. British, Canadian, and Australian campaigns generally run no longer than two months. Germany’s lasts four months. The 2012 U.S. presidential election will have lasted twenty months, from when the first Republican declared candidacy to election day. Also, since many countries tightly regulate TV and radio campaign ads, there is little need for U.S.-level campaign cash either.

Worse than a distraction, the U.S. way of conducting campaigns could be undermining confidence in its democratic and legal institutions. Most Super PACs are secretive organizations funded by a few hundred extraordinarily wealthy individuals. There are no laws requiring they disclose how they spend their money. Of Americans who are aware of the Citizens United decision, two-thirds believe it will have a negative effect on campaigns. The number of Americans who have “very little” or “no” confidence in members of Congress and the President is at or near all-time highs, a trend that has amplified in the last ten years. Super PAC influence will likely do more damage to already low levels of public trust.

Are there any ways to weaken the vicious cycle of spiraling campaign costs and fundraising? There are plenty of ideas. Using only public funds, like in some European countries, is one. Another is to use vouchers: Americans could be given a small amount of public money to give to the campaign of their choosing. But the trends are moving in the other direction.This year both presidential candidates have forgone public funds for the general election so they can spend as much as they wish.

The only solution may be to wait for costly television ads to lose their value. This may be occurring as internet ads become more popular. Internet campaign ads are becoming more effective than TV ads, because specific audiences can be better targeted. They are also vastly cheaper. Money wouldn’t matter as much, taking the steam out of Super PACs. Perhaps, then, elected officials could spend more of their time again on the job for which they are elected: governing.

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The United States faces enormous challenges created by an increasingly dynamic and competitive global economy. This blog offers a portal to the Renewing America initiative, which sponsors research, analysis, policy ideas, and dialogue on how best to revitalize the country's economic strength and build the foundations for future prosperity and influence.

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